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Gaming Legal & Regulatory

Sri Lankan casinos advertise in Indian cricket match, face possible criminal liability

In what may be a first attempt by casinos to publicly run an advertisement campaign in India, two Sri Lankan casinos ‘Ballys’ and ‘Marino’ put up banners and hoardings in the Eden Gardens stadium at Kolkata during the ongoing India versus West Indies cricket test series.

As per media reports, this was the first time that any casinos had publicly advertised in cricket matches.  The move has sparked an outcry in the media about such blatant and immoral campaigns by casinos. Some advocates have opined that casino ads may not per se be illegal as the casinos have other entertainment facilities which may be promoted. The matter has become a minor controversy of sorts with Kolkata Police Commissioner SK Purakayastha stating that he would verify the matter before commenting on any action.

While it comes as no surprise that Sri Lankan casinos which have aggressively been targeting Indian tourists (with Australian billionaire James Packer now planning a US $ 400 million resort in the island nation) would attempt to promote their offerings through various medium in India, the ignorance of the police authorities and legal luminaries on gambling advertisements is surprising.

Casino advertisements might be illegal in India
Casino advertisements might be illegal in India

Eminent lawyers have opined that the mere advertisements of casinos would not be illegal as per Indian laws. However,as noted by us earlier, in states like West Bengal, Maharashtra, Karnataka, Goa and Gujarat there is a specific law against publishing any ‘news or information’ that aids or facilitates gambling.  Apart from this, there are guidelines issued by the Advertising Standards Council of India (ASCI) and other rules which prohibit immoral and indecent advertisements across India.

Specifically,  Section 11 of the West Bengal Gambling and Prize Competition Act, 1957 allows the police to arrest without warrant any person who prints, publishes, sells or distributes or in any manner circulates any newspaper, news-sheet or other document or any news or information with the intention of aiding or facilitating gambling.

The punishment for contravention of this Section is imprisonment up to one month and/or fine up to rupees two hundred.  It may be argued that the advertisements by the Sri Lankan casinos would fall foul of this Section due to the broad sweep of prohibition on any kind of information relating to gambling promotion. The dictionary meaning of the term ‘casino’ would also clearly imply that there was invitation to a gaming house which may have other incidental facilities.

Further, the fact that the advertisements were visible on television would also mean that there could be criminal liability in other states as well as action by Information & Broadcasting Ministry and voluntary advertising organisations.

However, the casino advertisers seem to have taken a calculated risk in aggressively marketing their products hoping that the seldom invoked law against gambling advertising would not be used. Even if this Section is invoked, the punishment is minimal and would not deter advertisers. In all probability, it seems that the casinos would be let off with only a reprimand.

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Legal & Regulatory Poker

Online games of skill cannot be played or offered for cash according to Delhi district judge

In a recent development, a District Court in New Delhi held that all online games, whether games of skill or chance involving cash are illegal as per the Gaming as well as Information Technology Act and  allied Rules according to a news report in Card Player magazine.

Additional District Judge Ina Malhotra in her opinion stated that games of skill including games like chess, poker, bridge and rummy do not enjoy the Constitutional right to freedom of trade and commerce  guaranteed under Article 19(1)(g) of the Constitution as per a report in The Asian Age.

According to Judge Malhotra, conducting such games for profit was res extra commercium  and hence fell outside the ambit of the guaranteed right under Article 19(1)(g).

The court tried to draw an artificial distinction between games of skill played in the physical form and online, holding that games of skill or chance where the websites charge a slice of the winnings as fee or rake is illegal as per Indian law. Further, the court also held that  RBI and banks were free not to permit payment gateways for such websites and portals.

Interestingly, the court also held that advertising or sponsoring such websites is illegal under the penal provisions of the gaming Acts.

The court gave this decision in response to a petition filed by an internet start-up firm comprising of IIT-Delhi graduates. Delhi government was also made a party to this petition, but court proceeded ex-parte after the Delhi government failed to make its pleadings.

This decision is likely to impact the online gaming industry, especially a host of websites offering “skill games” for cash.  However since the decision is given by a District court, it is not binding on any court or forum in India. Hence, though this verdict may not have an immediate impact on online gaming websites especially since the matter of whether games of skill can be played for stakes and profit is pending before the Supreme Court in Mahalakshmi Cultural Association v. Director General of Police.

However the decision may change the RBI policy on allowing payment gateways for skill, though it is understood that decisions taken by the RBI in this regard can also be challenged in courts.

The legal basis for giving this verdict is unclear and decision may have been given without appreciating the well settled position of law and scheme of the Gaming and Information Technology law.  Online gaming companies are said to be unhappy with this decision and are contemplating further legal recourse on this issue.

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Gaming

Complaint filed against 'immoral' casino advertisements in Goa

Exclusive: A social activist in Goa has filed a criminal complaint against onshore and offshore casino operators as per a report in Times of India yesterday.

The unnamed activist has said that blatant promotion of casinos through hoardings and advertisements contravene Section 12 of The Goa, Daman and Diu Public Gambling Act 1976. As per Section 12 of this Act, any kind of promotion, news or publishing of gambling is prohibited and a person guilty for an offense committed under the Section may be punished with up to three years imprisonment and fine.

The complaint against casino operators has come just after my earlier post which disclosed the fact that advertising casinos would not only violate advertising standards, but may also amount to a criminal offense under various state gaming acts.

Casino owner have however argued that since the operations are licensed by the state government after payment of huge fees and Section 13-A (2) of the Goa gaming Act specifically excludes Goa’s casinos from any of the penal provisions of the Gaming Act, it is perfectly legitimate for them to  promote and showcase the gaming industry.

Commenting on the advertisements by casinos, social activist Dr. Sabina Martins who is the Convenor of Goa Bachao Abhiyan  (GBA) and is also associated with the Aam Aurat Aadmi Against Gambling (AAAAG) said, “We have tried making representations to the government right from the beginning to stop the menace of gambling. There is no regulatory body for overseeing the operations of the casinos and thus anyone (casino operators) interpret the ambiguous laws the way they like.

Just as it is perfectly legal to buy alcohol but not advertise it, the offshore casinos may be legal but they cannot blatantly advertise the casinos. There are instances of the Goa police taking advertisements and sponsorship from the casinos. This is clearly illegal.”

Martins added that her organisation would be taking legal advice before deciding whether or not to formally initiate a complaint. She also added that her organisation might also consider complaining to the Advertisement Standards Council of India (ASCI) against the indecent advertisements and further urged social organisations in other states to stop advertisements of casinos by initiating legal action.

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Legal & Regulatory

Advertising and promoting casinos: Grey area which may attract criminal liability

Exclusive: Every company having gaming operations would want to promote its activities through advertisements and news. However, in the states where no form of gambling is permitted, obviously any form of inducement to the general public to join the illegal common gaming house would amount to “aiding or assisting a common gaming house” (which is an offense in almost all states where gambling is illegal) and the accused would be liable to be imprisoned.

One would have noticed various advertisements and news items about Goa casinos appearing in leading newspapers. It is unclear is whether such advertisements of legal casinos of Goa and Sikkim would be illegal under various state gaming acts. These advertisements about casinos or news stories about the success of the gaming industry would certainly amount to “aiding or assisting operations of a common gaming house”. Even though gambling in the common gaming house (licensed casinos) in Goa is legal, such advertisements or news reports certainly encourage ordinary citizens to gamble, which is clearly against the objects and purpose of the gaming statutes of various states.

Secondly guidelines by the Union Ministry of Information and Broadcasting and other voluntary organisations  such as the Advertising Standards Council of India (ASCI) would also prevent publishing of something which induces gambling, which is clearly seen as an immoral and indecent activity.

Additionally as reported earlier, there is a comprehensive ban on publishing anything relating to or encouraging gambling on the internet after the passage of the IT (Due Diligence by Intermediaries Guidelines) Rules in 2011.

However, in the absence of any precedent or a clear clause preventing publishing of information relating to licenses gambling, one cannot be certain about the illegality of such an activity in all states barring Maharashtra, West Bengal and Karnataka where printing or publishing any “news or information” which facilitates gaming is prohibited.

For example, Section 12-A of the Bombay Prevention of Gambling Act 1887 (applicable to Maharashtra) says, “A police officer may apprehend without warrant any person who prints, publishes, sells, distributes or in any manner circulates any newspaper, news-sheet or other document or any news or information with the intention of aiding or facilitating gaming…”

Gaming statutes of West Bengal and Karnataka have used similar language in preventing publishing or printing of information relating to gambling. From the above section, it is apparent that extremely broad terms have been used criminalising publishing of any news or information relating to gaming and not just information relating to a “common gaming house” within the state. This means that states do not want their residents to be induced into gaming activities even in licensed casinos in India or other parts of the world.

Thus gaming companies would have to be careful in not promoting their casinos in India, but would rely on the world-of-mouth publicity and hope that tourists visiting Goa and Sikkim would be attracted to casinos only due to the popularity of these tourist destinations.